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Norbord Announces Final Phase 25M Investment Cowie Plant

Monday, 02 August 2010

Wood panel manufacturer Norbord has announced that it is committed to the final phase of a £25million investment programme within its site at Cowie, Stirlingshire.


The infrastructure investment will improve and extend the particleboard operations and will include the replacement of a forming station and pre-press components.


Karl Morris, managing director of Norbord Europe, said work will begin in the fourth quarter of this year.


He added: "The programme has already involved the installation a state-of-the-art continuous press which has allowed us to grow our market share in flooring and other construction-related products.


"However this final stage of works will provide us with added operating flexibility, a broader product mix, further quality improvements, capacity growth of over 10 per cent and a reduction in total manufacturing costs. 


"These planned cost reductions are important as we strive to partially offset rising wood costs, which are under pressure due to strong competition from the energy sector."


Norbord currently employs more than 250 people at its Cowie plant and a further 120 at a sister site in Morayhill near Inverness. It also employs in excess of 400 people at its plant in South Molton, Devon.


The latest investment comes at time when Norbord and the wider wood panel industry faces sustained buying power competition from the heavily subsidised energy sector.


Wood panels, a vital component in the construction industry and in furniture manufacture, are produced from virgin and reclaimed wood - the same materials which biomass energy plants are being incentivised by the Renewables Obligation (RO), through subsidies levied on consumers, to burn.


Electricity generators, purely as a consequence of these RO subsidies, can afford to pay more than double the price currently paid by the wood panel industry for its primary raw material. This has distorted the market and resulted in wood panel manufacturers seeing an average wood price increase over the last four years in excess of 30%, a trend which will only continue and accelerate.


Mr Morris believes that the Government's strategy is putting too great an emphasis on large scale wood-fired electricity and is threatening to destroy the wood panel industry which supports 8,700 jobs throughout the UK.


He said: "We are not anti-biomass and, indeed, as an industry we have pioneered the burning of our process-derived wood residues to generate heat and power, which is then fed back into our own manufacturing process. 


"This £25million investment programme in plant infrastructure demonstrates our continued commitment to growth and protecting jobs within our plant as well as the forestry industry across Scotland.


"Although we have received backing by MPs and a wide range of other organisations and individuals, it's vital that political decision makers now begin to listen seriously to our calls for more responsible use of wood and to create a level playing between ourselves and our competitors across the energy sector."




Issued by Beattie Communications (www.beattiegroup.com) on behalf of Norbord